During the first half of 2021, Wall Street investment banks recorded a growth in profits. This profitability could be attributed to the enduring low-interest rates that fuelled business and investment activity. But experts warn there are some dark clouds on the horizon that should not be ignored.
There’s little debate among analysts about the value that the financial industry has provided to New York State during the pandemic. But given that interest rates are expected to rise, and as pandemic stimulus spending dries up, those that watch Wall Street believe that New York State’s economy could take a downturned trajectory.
Despite the largest surge in profits since the first half of 2009 achieved by Wall Street in 2021, the third quarter of 2021 looks a bit grim. Inasmuch as Wall Street is beginning to haemorrhage jobs, this job loss could be a signal that New York’s economy is about to take a hit. In 2020, Wall Street lost 2% of its high-paid investment bank jobs which was a blow to the state’s revenue. Now as we head toward the end of 2021, analysts expect that Wall Street will shed another 2 – 3% of its top-paid jobs. This loss of top-paid jobs will also provide less revenue to the state that is experiencing an increase in spending amid budget and cost overruns.
Elaine Allan, BA, MBA
Technology & Business Blogger
Vancouver, BC, Canada